Home Prices Near 10-Year Peak in U.S.

Yet Not a Housing Bubble Market Says Nationwide...

According to a forward-looking housing barometer report released this week by Nationwide, U.S. home prices nationally have risen significantly since the 2008 mortgage crisis, but "healthy fundamentals" in the majority of local housing markets signify that another housing bubble isn't imminent.

Today's housing market remains positive and in stark contrast to the conditions during the housing bubble when more than three-fourths of metro areas flashed warning signs at least two years before the bubble popped, according to Nationwide's Health of Housing Markets Report (HoHM Report).

The latest HoHM Report finds that continued job growth, increasing incomes and record low mortgage rates across the U.S. are keeping housing affordable. Additionally, modestly tight mortgage underwriting criteria and a decided lack of overbuilding should support housing markets in the year ahead. The report also shows that there are a handful of regional markets where house prices are more than 20 percent above their pre-crash peaks.

"Home prices reaching or even passing their pre-crash highs of a decade ago does not signal a bubble in the near future," said David Berson, Nationwide senior vice president and chief economist. "Even with record-high prices in some markets, housing remains relatively affordable, and we are not concerned about a national bubble."

Berson noted that only 7.1 percent of homeowners remain underwater on their mortgages and housing market metrics across the board remain healthy. "We're optimistic that the housing market will continue to boost the U.S. economy," he said.

The quarterly report evaluates the housing health for the U.S. and 400 metropolitan statistical areas. Overall, it indicates that the vast majority of local housing markets will experience sustainable housing activity during the next year with little chance of substantial downturns.

Incomes in six markets across the country, however, are not keeping pace with sharply rising home prices. They are Dallas, Houston and Austin, Texas; Denver, Colo.; and San Francisco and San Jose, Calif. Meanwhile, home prices in several metro areas that experienced the biggest increases in the housing boom remain more than 20 percent below their peak. They include Bakersfield and Fresno, Calif.; Las Vegas, Nev.; Orlando, Fla.; and Tucson and Phoenix, Ariz.

The report also found that:

• While more than half of metro areas are still below their peak home prices of a decade ago, about 150 areas set all-time price peaks already in 2016. Housing trends driving the overall market suggest that national home prices should surpass their previous peak in coming years. 
• The energy sector slowdown weighs heavily on job growth and housing sustainability in Louisiana, North Dakota, Texas and Wyoming, placing metro areas in those states among the bottom 10 states on the index for the second consecutive quarter. Many of them have been at the bottom for the past year. 
• Major MSAs among the top 50 include Baltimore, Cincinnati, Detroit and Jacksonville; meanwhile, three of the 40 largest MSAs remain concerning, just outside of the bottom 10: Houston, Seattle, and New Orleans. The 10 top metro areas in the index, which reflects the health of housing, are, in order, Fayetteville-Springdale, Ark.-Mo.; Saginaw, Mich.; Valdosta, Ga.; Cumberland, Md.-W.Va.; Jackson, Tenn.; New Bern, N.C.; Buffalo-Niagara Falls, N.Y.; Niles-Benton Harbor, Mich.; Durham-Chapel Hill, N.C.; and Manhattan, Kan.

Residential News » Irvine Edition | By Michael Gerrity

Which political party is better for home ownership?

If you want to know which political party is better for home ownership, the answer is: It depends on where you live.

Nationwide, homeowners living in Democrat-controlled congressional districts have gained more than twice as much in housing wealth as homeowners living in Republican-controlled districts over the past eight years, according to ATTOM Data Solutions. However, those in Republican districts in Florida fared better than their counterparts in Democrat-controlled districts, while the opposite is true in Orange County.

Nationwide, homeowners living in Democrat-controlled congressional districts have gained more than twice as much in housing wealth as homeowners living in Republican-controlled districts over the past eight years. Nationwide, homeowners living in Democrat-controlled congressional districts have gained… more

Key U.S. highlights include:
Among 2.4 million single family homes bought eight years ago, those in Democrat-controlled districts have gained an average $59,467 in value since purchase — a 21 percent return — compared to a $22,086 return representing a 10 percent ROI for homes in Republican-controlled districts.

Homeowners in Republican-controlled districts are paying lower property taxes — $2,514 on average representing a 1.02 effective tax rate compared to $3,659 representing a 1.07 percent tax rate for homeowners in Democrat-controlled districts. Counter to the national trend, seven of the 11 battleground states in the 2016 presidential election have produced better ROI for homeowners in
Republican-controlled districts.

Here are Florida’s stats:
About 42,190 single-family homes bought eight years ago in congressional districts with a Democratic representative have gained an average of $21,990 in value since purchase, an 8 percent return. In comparison, about 95,813 single-family homes bought eight years ago in congressional districts with a Republican representative saw an average $26,790 return, representing an 11 percent return on investment.

Homeowners in Republican-controlled districts are paying lower property taxes —$2,895 on average for a 1.09 percent effective tax rate compared to $3,937 representing a 1.37 percent tax rate for homeowners in Democrat-controlled districts.

Here are Orange County stats:
Home buyers saw an average $12,682 gain in value, or a 6 percent return, in congressional districts with a Democratic representative, while those who bought a home eight years ago in congressional districts with a Republican representative saw an average $13,317 gain, or a 4 percent return. Homeowners in Democrat-controlled districts are paying lower property taxes — $2,277 on average for a 1.03 percent effective tax rate, compared to $4,691 or a 1.37 percent effective tax rate in Republican-controlled districts. - Susan Lundine, Managing Editor Orlando Business Journal